The Egyptian government has paid $1.2 billion this month to foreign oil companies to settle part of its overdue arrears, as the country battles a record low gas output, a senior official revealed to Asharq Business.
Despite this payment, Egypt’s total outstanding debt to international oil and gas firms has risen to $7.5 billion—up from $6.3 billion in early April.
The debt is owed to companies involved in exploration and extraction activities across the country’s hydrocarbon-rich regions.
Egypt, once a major gas exporter, is now grappling with declining production, which has dropped to 4.2 billion cubic feet per day—well below the 6.2 billion cubic feet required to meet current domestic demand.
This demand is projected to surge to 7 billion cubic feet daily during the upcoming summer months.
The $1.2 billion payment does not fully clear the arrears but is seen as a strategic move by the government to restore investor confidence and incentivize upstream activity.
According to the official, around 60% of the latest disbursement went to three leading international energy companies: BP (UK), Eni (Italy), and Apache (USA).
Egypt has also called on foreign oil companies to ramp up exploration and drilling efforts, even as recent campaigns in the Red Sea yielded disappointing results.
To attract new investments, the country launched a licensing round in March offering 13 oil and gas blocks across the Mediterranean Sea, Gulf of Suez, and Western Desert.
Energy major Chevron is currently in discussions with the Egyptian authorities to expand its operations in the Mediterranean, having submitted bids for two offshore blocks during last year’s licensing round.
The country’s lawmakers also recently approved two major deals that will allow Russia’s Lukoil to partner with Egyptian firms to explore and develop concessions in the South Wadi El-Sahl region
Eni CEO Claudio Descalzi announced last month that the Italian energy giant plans to invest over $26 billion across Egypt, Algeria, and Libya over the next four years to bolster oil and gas production in the region.
With domestic gas output hovering near an eight-year low, the Egyptian government hopes that settling part of its debt and launching new exploration initiatives will help stabilize supply and reduce reliance on energy imports in the near future.
